When Do you think the house price will be bottomed and recover?

[mtg2008]

Hi.

I own two houses in Orange county, California. I am doing okay, no late payments, everything is current. However I am feeling very scared that the house price has dropped so much, and if you turn on the TV, look on the news on CNN Money every day, bad news, bad news all day long about house price decrasing 25%, more people losing their house, etc.

I know this place is for us to help each other to save our houses and to deal with the problems that we have. I just want to know if any one can have some positive opinion about this market.

I put 20% down payment for the rental townhome 3 years ago. I think that down payment by now is all gone, I feel very painful. I wish I had never bought that house. I plan to hold on the house for at least 5 more yrs, but so many negotive news and opinions saying it will taking much longer time for this housing market to get recovered.

I am glad that I found this forum. Thanks everyone!

[mtg2008]

I mean do you think when the market will be at least stable, and have chance to recover...

[faith]

Originally Posted by mtg2008

I mean do you think when the market will be at least stable, and have chance to recover...

Hello,
Peace be with you!

I just saw it on TV News, Fox news today, that there's a lot of foreclosures and more to come and it will hit bottom by the year 2009, I think they mentioned, the prices of homes all over the US will hit bottom, by July 2009. Meaning the prices will go down rapidly and quickly because of more foreclosures, etc.

Sorry, we all feel your pain. Take courage and be strong.

God loves you and God bless you.

Faith

[mtg2008]

Thanks Faith,

I will stay positive and strong. Thanks for your message!

[AZ Meltdown]

Pundits have been calling the bottom for the last 2 years.

My guess nationally 2 more years to go. Most of the subprimes are about done, Alt As are just starting to fold and Primes will be right on their heels.
Some areas like Phoenix will probably go 3 years.

The Alt As and Primes will have a far bigger effect because the homes were more expensive, in nicer areas and they had good credit. A good FICO score will not guarantee a loan in the future, a LARGE down might.

Lenders that survive the banking meltdown will reduce home lending and will continue to do so. Reducing buyers.
Less buyers, lower prices.
Cash will be king!

Then it will linger at the bottom for a couple of years and make a slow recovery.
We will not see the peak prices of 2005 for 8-10 years.

Our economy has huge problems.
We as a nation and individuals spend way more than we make, and we have to pay interest on all that money.
2 expensive wars currently, nether looking all that good.
Govt entitlements keep growing.
Good paying manufacturing jobs are mostly long gone.
Our whole economic model is based on cheap energy. Big cars, big houses, big commutes, big energy using activities. The Big 3 US automakers are already on the ropes and looking for a taxpayer bailout. Other industries based on cheap energy will also falter.
Too many low end service jobs.
A second tier public education system.
The worlds largest prison population.
None of the above are even being addressed, let alone resolved. That will continue. That will impede recovery.

We are now connected and competing against the world and we are no longer all that efficient.
Looking at US home prices as a small but connected component in the big picture doesn't look good.

Sorry, didn't mean to bum you out, but plan accordingly.

[mtg2008]

bad news everyday. It seems no hope. Shall I move to other country. I am going to be US citizen tomorrow. I am excited and I am also very disappointed.

Thank you.

[faith]

Originally Posted by mtg2008

bad news everyday. It seems no hope. Shall I move to other country. I am going to be US citizen tomorrow. I am excited and I am also very disappointed.

Thank you.

mtg2008,
Congratulations!

No, I don't think it's a good idea to move. Which country! Let see which country.

China, there is no freedom of speech and religion there, the air is so polluted and you might end up like the American man that went there to watch the Olympics and ended up dead. Russia, same thing, they might invade your privacy and ended up like Georgia. Philippines maybe, no the leaders there are very corrupt, TB is airbone, holdapers, everywhere they even kill for a useless cheap cell phone. Cuba, no, that's why Florida is full of citizens of Cuba, Israel the Holy City, that's the place I want to be but Palestinians are there and you don't know which one is Palestinians and which one is from Israel. Iraq, the troubled country? No, that's why America is bankrupt because our leaders gave our money to them.
I feel sorry for our soldiers losing their lives everyday there.

I think you're better off staying in the USA the land of opportunity though it seems like it's not, it is. There is no Great Nation but America where you can say what you want and they respect your opinion because you are entitled to your own opinion. At least now you can vote against everything that seem to good to be True.

Welcome to America, our great Nation where our forefathers blessed this nation and became the Land of Opportunity where everybody is treated equal, where you and I can voice our opinion and free from persecution, where I can freely worship and praise the God of our forefathers Abraham, Isaac and Jacob. America, America, GOD BLESS THE USA!!!

God bless you and all your families and all your endeavors.


Faith

[mtg2008]

Thank you, Faith.

[AZ Meltdown]

"Shiller: No V-Shaped Recovery For Housing

Thursday, September 11, 2008 3:45 PM

If you're hoping that home prices will recover as sharply as they fell, forget it, says Robert Shiller, Yale economist and co-developer of the Case-Shiller housing index.


Housing markets simply don't experience the "V-shaped" recoveries that most of the homeowners who Shiller and Karl Case recently surveyed believe, Shiller said in an interview with Yahoo Finance.


"Homeowners are not as optimistic as they used to be, but it's still widely believed that home prices are going to go up quite substantially in the long run," Shiller reports, adding that recovery level expectations are still way too high.


"There are a lot of misconceptions about home prices. People think there's a strong uptrend to them, but my data show there is not," says Shiller.


"If you correct for inflation, U.S. home prices in 1990 were about the same as they were in 1890."


"Optimism is a good thing most times," observes technical analyst and trader Matt Blackman.


"(Given current data) it is certainly too soon to break out the housing bottom party shoes and start buying homes again just yet."


Moreover, Shiller points out that if today's home prices recover sufficiently at a nominal level, on a real basis they may still be dropping for a long time to come.


Even if prices stabilized at this level, some 10 million homeowners would owe more money on their homes than they could get from selling them. That leaves a lot of financial companies with major balance sheet problems.


"Housing is a manufactured item. It can depreciate and (builders) can make more of them," says Shiller.


"The problem is that when people are underwater like this, it affects all their decisions," he says.


"It's difficult for them to move because they can't pay off their mortgage, their confidence is lowered, and they're likely to spend less. Even if home prices go up a little bit, they'll still be in that situation."

[AZ Meltdown]

Wow month after month things just keep getting more bleak.

Most of the lenders/pundits who said we had bottomed or predicted a short stop to the bottom, have now revised their predictions to late 2009 with prices nationally falling another 15-20% from the peak.

Jim Cramer who said we have hit bottom several times, now says 3rd quarter in 2009.

That said, most believe the govt intervention will only delay the reaching the bottom.
Lenders receiving gobs of taxpayer cash will be able to hold those bad debts longer, hoping they will get better instead of dumping them now, hitting the bottom and moving forward.
All the schemes from the FED, the treasury, congress and now McCain are all an attempt to prop up home prices which I don't think will work.
Housing is still way overpriced by median income or rent ratios!!!

So with govt meddeling in the freemarket, make that 2011 or longer.
Maybe even 2014 or longer with a good recession.

[AZ Meltdown]

Thought it might be worth bringing this up to the top.

One year after this post was started and we are still going down.
Don't expect the bottom in the third quarter of this year as many had experts predicted.

2-3 more years down is my revised guess.

[The Professor]

In the fall of 2005, when I first started sensing that we had reached the peak and were heading South, I told my students that the bottom would probably be reached in 2011. I have not changed my opinion. Unfortunately the bottom isn't the end of the story. For before we start to see property values rise interest rates must climb so the Federal Government will be able to continue to borrow. Sadly since the price of real estate will be more focused on affordability, as interest rates go up, affordability heads South. The Federal Government will be careful in exercising control over the pace at which interest rates rise so that prices don't decline, but they will not go up either, leaving a lengthy bottoming period.

So, whether you jump in to the market in 2011 or wait until 2015, my sense is pricing will be flat.

Daniel

[SillyWorld]

I am in PA state and housing has lost little over the last 3 years if not remained the same...BUT over June properties have gone down $10,000.00 to $15,000.00, that is in 1 month, so I look for prices in the North East to now start on the downward trend.

[nvjen]

Here in northern NV, sales came to a screeching halt last winter. The prices have stayed about the same since then, but 90% (unscientific observation) of the inventory are short sales. There are some standard sales and foreclosures sprinkled about, but just about anything you look at is a short sale. And a ton are pending, but have been pending for months and months. We all know the reason for that...banks are playing the waiting game. I've talked to some mortgage brokers who say that it is so difficult to get loans to close now even with willing and able buyers. The new appraisal laws make it difficult, too. I think it's a difficult transition, from one extreme to the other, and we're all having to pay the price.

[kent302]

Originally Posted by The Professor

In the fall of 2005, when I first started sensing that we had reached the peak and were heading South, I told my students that the bottom would probably be reached in 2011. I have not changed my opinion. Unfortunately the bottom isn't the end of the story. For before we start to see property values rise interest rates must climb so the Federal Government will be able to continue to borrow. Sadly since the price of real estate will be more focused on affordability, as interest rates go up, affordability heads South. The Federal Government will be careful in exercising control over the pace at which interest rates rise so that prices don't decline, but they will not go up either, leaving a lengthy bottoming period.

So, whether you jump in to the market in 2011 or wait until 2015, my sense is pricing will be flat.

Daniel

Agreed.
In my opinion, things are still too choppy to dive in to real estate.
No where is it more true than CA, it is all about location*3.
Take Sacramento, which I am familiar and have a vested interest.
There are at least 3 levels of homes, low-end, mid and high.
The low end may have bottomed, even undershooting. But the mid is on the edge and sellers are in denial. By this winter, it looks ominous for them. The high-end is frozen. All the action is at the low-end. No move up buyers as foreclosures and unemployment break the normal sell/buy linkage.
If something is still falling, why would one take the risk of it falling lower if you can buy the same when it starts to go up? It is not going to shoot up.
I also believe there is large amount of side-lined REOs or potential REOs waiting for better times. In addition to owners/investors hanging by a thin thread ready as soon as prices improve. The problem is they will mop up any supply shortage which is necessary for real price recovery. There are too many red arrows to see a quick bottoming, at least in the mid-to-high end.